New Jersey's New Wage Law Sets the National Standard for Equal Pay Legislation
By signing the Diane B. Allen Equal Pay Act into law on Tuesday, New Jersey now has the strongest protections against wage discrimination in the country.
What does this new law do?
This new law, which becomes effective on July 1, 2018, makes it illegal for employers to offer lower pay and benefits to women and minorities, performing substantially similar work to their male counterparts, solely because of their gender and race. Now, employers who pay male employees more than their female counterparts must be able to establish how their experience, education, and production sets them apart from those that are paid less. Importantly, the new law prevents employers, attempting to become compliant with it, from cutting the wages of the higher-paid employees in order to make salaries comparable with those paid less. Women seeking damages in court are entitled to recoup treble damages (meaning three times any money damages) for lost wages for up to six years, which is three times longer than the federal law's two-year cap.
Why is equal pay legislation important?
Equal pay laws, both on federal and state levels, are meant to address the established wage gap between the salaries of male and female employees. Women working full-time earn just 80 cents for every dollar that men, in similar positions with similar experience, earn. The gender wage gap is even lower for mothers, who earn on average 71 cents for every dollar paid to fathers, and for minority women, with black women earning 65 cents and Hispanic women earning just 58 cents per dollar earned by white males. Studies reveal that the gap widens as workers age. According to the Institute for Women's Policy Research, if unaddressed, the wage gap will cost a millennial woman who works full-time and year-round over $1 million during the course of her career.
While other states in the tristate area have similar wage gap protections, New Jersey's law entitles women to recoup damages over a longer period of time (up to six years) if they are successful on their claims. Notably, just last year, Delaware Governor John Carney signed a gender pay gap law that makes it unlawful for an employer to screen applicants based on their compensation histories and unlawful to require that a job applicant provide prior compensation information when seeking employment. While Pennsylvania also has laws prohibiting employers from taking into account an applicant's compensation history, many critics point out that Pennsylvania's overall wage gap laws are too weak to be effective, with loopholes that allow fewer employees than the New Jersey law to benefit from the law's protections. As a result, women in Pennsylvania earn less than the national average, costing Pennsylvania women who work full-time - some of whom are only paid 54 cents for every dollar her male counterpart makes - a combined total of more than $19 billion every year. With the enactment of New Jersey's law, the calls to close the loopholes in Pennsylvania's equal pay law will get stronger and stronger.
With equal pay laws so prominent in the state and national conversation, employers should take this time to review their compensation practices and pay structure to ensure that they are compliant with state and federal law. An employee concerned with whether he/she is being compensated fairly based on his or her gender, race, etc., should consult with an attorney about his/her particular situation.